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Yes, but the benefits outweigh the risks imo. Anyways, you need 5.03 official firmware installed on your psp in order for it to work. If you've updated recently, then you would have 5.51 official firmware.

Well, aside from free games, theres also homebrew and emulators. . . I only spend around 10% (estimation) of the time I use my PSP for actual gaming. Homebrew adds a lot of functionality to it and when you're bored of PSP games (which will probably be often) you can use the emulators. I think it emulate everything PS1 and below, excluding sega saturn.

There are a lot of different homebrews. . . With some you can read ebooks (my favorite). With others you can play different file formats (ex. flac, mkv). If your memory stick is small, there are homebrews that allow you to stream games and homebrew, or even videos directly from your pc to psp. With PSP 1000 you can use it as remote for various devices (ex. tv, dvd player, stereo). You can use it as a gamepad for your pc. Lot's of different things. I honestly can't imagine how people without custom firmware keep their PSPs. . .

How? I don't really care much for hacks, and I keep mine...'Sides, what if the software is faulty? It'll fry the memory stick and(worst-case scenario) the PSP itself. Also, what happens if the PSP itself breaks? Everything you put on it goes down with it, as opposed to owning a shitload of games, whereas all you'd need to do is cough up $200-250 for a new one.

Fry the memory stick? If the software is faulted then the software won't work. The sites that host these homebrews and the like delete things that don't work and people like to leave comments on it as well. If the PSP bricks (had my PSP over a year and never experienced this) then you probably didn't follow the instructions.

The only surefire way I know to brick a PSP is to shut it off while it's updating and that goes for hacked and unhacked PSPs. There's a homebrew that can fix semi-bricks. . .

I said I can't imagine how people with normal PSPs keep them because it's no mystery that PSP games are released less frequently than other consoles. With the limited functionality of a normal PSP boredom is bound to come your way eventually.

god stop trying to justify not hacking your psp. if you don't want to risk it fine.
stop trying to defend yourself, and if you wanna keep paying for games, by all means, be my guest. but i guarantee that if you were to hack it, you wouldn't regret it.